NZD: NZD/USD - Finds Demand Just Below 0.6000
The NZD had a range overnight of 0.5988 - 0.6012, Asia is trading around 0.6000. The NZD has found some demand just below the 0.6000 area as the US stock market pushed higher again, and the USD bounced.
- Milk Price Auction Sees Second Consecutive Drop : Overnight, the fortnightly whole milk powder auction saw prices fall a further 3.7% versus the prior result. From $4332, we are now back at $4173. This is the second consecutive decline for the auction result, but by recent standards we are still elevated from an historical standpoint.
- Bloomberg - “Donald Trump signed a directive formally raising steel and aluminum tariffs to 50% from 25% as of June 4, the White House said. Scott Bessent said Beijing has a choice on whether it’s a dependable partner, reiterating that China must shift to a more consumption-led economy.”
- The NZD held up ok with demand seen just below 0.6000, this while the USD continued to retrace higher overnight. Can it have another look back above 0.6050 this week, or will the market wait to first see what NFP has to say.
- The support back towards 0.5850 has held very well, and while this continues to hold expect buyers to be around on dips. A clear break above 0.6050 is needed to provide the spark for the next leg higher.
- CFTC Data showed Asset managers maintaining their shorts, while the leveraged community pared back only a little of the decent short they had initiated the week before.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.5900(NZD401m). Upcoming Close Strikes : 0.5990(NZD390m June 5), 0.5895(NZD305m June 5)
Data/Event : Cotality Home Value
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg
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ASIA: Coming Up In Asia Pacific Markets On Monday
2300GMT 0700HKT 0900AEDT Australia S&P Global PMI Composite/Services Apr F
0100GMT 0900HKT 1100AEDT Australia Melbourne Institute Inflation Gauge Apr
0130GMT 0930HKT 1130AEDT Australia ANZ-Indeed Job Ads Apr
AUSSIE 10-YEAR TECHS: (M5) Remains Toward Top End of Recent Range
- RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 1: 95.960 - High Apr 7
- PRICE: 95.735 @ 16:19 BST May 2
- SUP 1: 95.420/95.300 - Low Feb 13 / Low Jan 14
- SUP 2: 95.275 - Low Nov 14 (cont) and a key support
- SUP 3: 94.640 - 1.0% 10-dma envelope
Aussie 10-yr futures extended a recent strong bounce through to the Friday close, putting prices through the top end of the recent range. The confirmed breach of 95.851, the Dec 11 high on the continuation contract, reinstates a bull cycle and focuses attention on resistance at 96.207, a Fibonacci retracement point. A stronger bearish theme would expose 95.275, the Nov 14 low and a key support. Clearance of this level would strengthen a bearish condition.
US TSYS: Front End Leads Yield lower
TYM5 reopens at 111-10, up 0-05 from closing levels in today’s Asia-Pac session.
- Friday night US 10-year yields had a range of 4.1942% - 4.3297%, closing near the highs.
- Treasury yields were quite a lot higher Friday night reacting to a strong NFP, The move was led by the front-end with the 2yr up 0.13, flattening the yield curve.(2s10s -3.25 at 48.232).
- MNI US - Nonfarm payrolls were higher than expected at 177k (sa, cons 138k) of which private contributed 167k (sa, cons 125k).
- However, two-month revisions of -58k offset the 39k beat for nonfarm payrolls, with a similar story for private (a 42k surprise vs -48k two-month revision).
- Downward revisions were concentrated in March.
- This better than expected data drove price action for most of the US session.
- Kato : “We are not considering the sale of US Treasuries as a means of Japan-US negotiations,” Kato spoke in Milan, Italy on Sunday, where he is attending the annual meeting of the Asian Development Bank.(per BBG)
- The 10-year Yield range seems to be 4.10% - 4.45%, with the pivot the 4.30% area for now.
